Time to prioritise education and health
Muchkund Dubey | JANUARY 30, 2020
In recent months, the government’s macroeconomic policy has
acquired a new salience in the context of reversing the current slowdown. The
policy currently being pursued is intended primarily to incentivise potential
investors by facilitating ease-of-doing-business and making large-scale
concessions to the corporate sector. In this context, the government is taking
credit for the relatively higher, though by no means spectacular, flow of
foreign private capital and the progress of India in the ease-of-doing-business
rankings. Further, tax concessions given to the corporate sector in the last
budget are estimated at more than ₹1.40 lakh crore.
Besides these, the remaining limitations on foreign
investment are being relaxed or removed. In the process, the conditions laid
down for these investments to serve social objectives and help in
indigenisation are being jettisoned. But in spite of these measures, and amidst
the absence of demand, there is little evidence of any significant increase in
investment by the private sector.
Call for more liberalisation
However, economists who are in favour of the above
development strategy would like the government to go further and implement
other items on their reform agenda, such as labour market liberalisation and
removal of constraints on acquisition of land for industrial purposes. These
economists brush aside the negative impact such reform measures are likely to
have on the incomes, living conditions and the economic security of the workers
and the agricultural class. Moreover, the policy of freedom of hiring and
firing of labour will be counterproductive as it would squeeze demand further
in a situation of huge demand deficit.
Abhijit Banerjee, a co-winner of the Nobel Prize in
Economics, has been one of the few economists making a case for transferring
income to the poor who are likely to spend the additional income to buy goods
and services, an enhanced production of which offers the best chance for
reversing the current slowdown. In this connection, he has singled out the
mechanisms of the Mahatma Gandhi National Rural Employment Guarantee Act and
direct income transfers. But, even he has not mentioned the potential of
investment in social sectors for creating demand in the short run by way of
opening avenues for large-scale employment, and imparting competitiveness and
sustainability to the Indian economy in the medium and long run.
It is widely recognised that the social sectors in India
are grossly underfunded. No mainstream economist or policymaker has come out
with a suggestion for enhancing expenditures in these sectors. On the contrary,
they have made expenditure in social sectors conditional upon higher rate of
growth. Most mainstream economists and policymakers also believe that public
expenditure in social sectors can only have a long- term impact on growth, and
what is now needed is macroeconomic policies which can have immediate or very
short-term impact. This belief is deeply flawed, as it can be demonstrated that
increased public expenditure in social sectors in the magnitudes required for
meeting the constitutionally mandated objectives can have short- and
medium-term effect of enhancing employment, generating demand and attracting
investment.
RTE and teacher employment
Let us take the example of the impact of investment in
school education on employment and, hence, demand creation. The Right to
Education Act (RTE) sets out the objective of universalising elementary
education in five years. The National Education Policy, 2020 states that the
Act “will be reviewed... to ensure that all students... shall have free and
compulsory access to high quality and equitable schooling from early childhood
education (age three onwards) through higher education (i.e. until Grade 12)”.
We, at the Council for Social Development, have calculated the magnitude of
demand creation by meeting just one condition for realising this objective,
i.e. employment of teachers. We have arrived at a figure of 5.7 million
teachers by taking as the base the total number of children going to school
from the 2011 Census; adjusting it appropriately for rate of growth in
population since then; dividing these numbers by the pupil-teacher ratios fixed
for each level of schooling; and deducting from it the number of teachers
currently employed, obtained from the Unified District Information System for
Education data. (As there is no fixed pupil-teacher ratio for children in the
3-6 years age group, we have assumed a ratio of 10:1).
The recruitment of 5.7 million additional teachers over a
period of, say, five years, can create huge scale demand. And, this is only one
factor essential for universalising quality school education. There is also a
large gap between requirement of infrastructure in the schools and that
available and built recently. According to government data, only 12.5% of the
schools covered by the RTE Act were compliant with RTE norms, most of which are
related to infrastructure. Meeting these norms has the potential of creating employment
on a large scale.
Education and employability
Similarly, in the health field, there is a vast number of
vacant posts for professionals at these levels. There is a huge deficit of
paramedical workers, middle-level health workers, nurses and trained doctors.
This is evident from the long queues of patients in the ill-equipped and
inadequate primary health centres and government hospitals.
The fact that health and education are of instrumental
value in driving growth, creating employment and improving people’s well-being
is widely recognised but often forgotten when it comes to making investment in
these sectors. Education has a crucial role to play for an individual in
gaining employment and retaining employability. If we compare 2011 and 2017
data released by the Labour Ministry, the gap in educational attainment emerges
as the single most important factor separating the gainers from the losers of
the higher rate of growth during this period.
Health and education have been widely recognised as
public goods. In most developed and several developing countries, these
services are either provided or are heavily subsidised by the state.
Unfortunately, in India, we find the opposite trend of the state withdrawing
from the provision of these services and consequently their rapid
privatisation. In fact, the government has a well-entrenched policy of
encouraging privatisation in both health and education. But, privatisation in
these sectors has not led to efficiency or improvement of quality. It has only
destroyed public sector institutions, promoted greater inequality and pushed
the poor out.
The gestation period of projects in social sectors is not
as long as it is made out to be. After all, in the RTE Act, a gestation period
of only five years was envisaged for universalisation of elementary education.
It is therefore time for reprioritising education and health in the scheme of
development strategy and the allocation of budgetary resources.
Muchkund Dubey is a former Foreign Secretary and
currently President, Council for Social Development
Source : https://www.thehindu.com/opinion/lead/
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